Results Support Initiation of Phase 2 Program With Multiple Dose
Subcutaneous Regimen

Conference Call and Webcast At 4:30 pm ET Today

BERKELEY, Calif., July 14, 2009 (GLOBE NEWSWIRE) -- XOMA Ltd.
(Nasdaq:XOMA), a leader in the discovery and development of
therapeutic antibodies, today announced positive results from
single dose and multiple dose subcutaneous arms of the randomized,
placebo-controlled U.S. Phase 1 clinical trial of XOMA 052 in Type
2 diabetes patients. Of the 98 patients evaluated in different
parts of the Phase 1 clinical trial, XOMA is reporting today on the
26 patients who received active drug in both single and multiple
doses by subcutaneous route of administration and all 17 placebo
patients. The results continue to demonstrate that XOMA 052 is well
tolerated in patients. Further, a multiple dose regimen of XOMA 052
showed clinically meaningful reductions in glycosylated hemoglobin,
HbA1c, and high sensitivity C-reactive protein, hsCRP, compared to
a single dose regimen. Generally, a more consistent response was
seen across patients in the multiple dose regimen compared to
single dose regimen. New positive biological activity was observed
with sustained improvements noted in fasting blood glucose, with a
reduction of 29 mg/dL at day 84, equating to approximately a 1%
reduction in HbA1c, and standard biomarkers of systemic
inflammation and cardiovascular risk. Pharmacokinetic results
continue to support monthly or less frequent dosing and drug
bioavailability in patients by subcutaneous injection was 62-70%
compared to IV administration. These Phase 1 results support XOMA's
plan to begin Phase 2 testing of XOMA 052 in Type 2 diabetes in the
current quarter.

As important, this is the first study of an IL-1 targeting agent
to demonstrate evidence of improved insulin sensitivity. An
increase in insulin production was previously reported in earlier
studies with XOMA 052, suggesting an additional benefit in diabetes
patients.

The growing body of evidence for XOMA 052's anti-inflammatory
effects also supports its potential in cardiovascular and other
inflammatory diseases. Published studies show that IL-1 beta plays
a key role in the initiation, growth and instability of plaque
leading to heart attacks and other cardiovascular events.

"An anti-inflammatory approach to Type 2 diabetes and other
cardiometabolic diseases is a potential breakthrough for treating
these very common medical conditions," said Marc Y. Donath, M.D., a
pioneer in anti-inflammatory approaches to Type 2 diabetes,
Professor at the University Hospital of Zurich and XOMA 052 Swiss
clinical trial principal investigator. "These results confirm
previous XOMA 052 findings in reducing inflammatory biomarkers and
improving glycemic control. For the first time, they demonstrate
the potential for XOMA 052 to break the vicious cycle of
glucotoxicity by improving insulin sensitivity and restoring beta
cell health through IL-1 beta regulation."

"We remain very excited about the data generated thus far from
this Phase 1 program, including important new evidence of
biological activity. Moreover, we are seeing these activities at a
very low dose, at least ten times lower than many approved
monoclonal antibodies," said Steven B. Engle, XOMA's Chairman and
Chief Executive Officer. "While this Phase 1 trial has achieved its
primary purpose of providing valuable safety and pharmacokinetic
information, we are delighted to have seen the first evidence of
improved insulin sensitivity as well as improvements in other
biomarkers associated with Type 2 diabetes and cardiovascular
disease. When combined with our previously reported results of
improved insulin production, we believe XOMA 052 has demonstrated
the potential to address two important arms of the diabetes disease
process: insulin production and peripheral insulin
sensitivity."

This is the first time XOMA is reporting data regarding the
subcutaneous (SC) administration of multiple doses and single doses
of XOMA 052 in Type 2 diabetes patients. Previously XOMA reported
positive results from a study evaluating the intravenous (IV)
administration of a single dose of XOMA 052 at different dose
levels. The SC route of administration is particularly important
for treating chronic diseases such as Type 2 diabetes.

"In the 0.03 mg/kg multiple dose cohort, we observed median
reductions of over 50% in CRP and up to 0.6% in HbA1c at day 56, as
well as rapid, meaningful and prolonged reductions in fasting blood
glucose," said Patrick J. Scannon, M.D., Ph.D., XOMA's Executive
Vice President and Chief Medical Officer. "Taken together, these
data demonstrate, as expected, the potential for added benefit with
multi-dose treatment using XOMA 052. In addition, the 0.03 mg/kg
multiple dose median reduction of over 50% in CRP and up to 0.6% in
HbA1c at day 56 compares favorably to reductions of 29% and 0.3%,
respectively, for a single 0.1 mg/kg dose at the same time point.
More patients responded to the multiple dose regimen as well. The
bioavailability and pharmacokinetic results enable us to initiate
our Phase 2 program using XOMA 052 in monthly or less frequent
subcutaneous dose regimens."

XOMA 052 targets interleukin-1 beta (IL-1 beta), a master
signaling protein that triggers auto-inflammatory pathways in the
body and is believed to be an underlying cause of cardiometabolic
diseases including Type 2 diabetes and cardiovascular disease.

A summary of the Phase 1 clinical trial design and detailed
results follows.

Phase 1 Clinical Trial Design

The U.S. Phase 1 study enrolled 68 Type 2 diabetes patients and
had three parts: multiple dose by subcutaneous injection; single
dose by subcutaneous injection; and single dose by intravenous
injection. Each dose level group included one patient who received
standard of care plus placebo and five patients who received
standard of care plus XOMA 052. Of the 98 patients enrolled in the
Phase 1 studies, a total of 81 patients have been dosed with XOMA
052 along with 17 placebo patients, which includes patients treated
in a Swiss intravenous Phase 1 trial with the same entry criteria
as the U.S. trial.

In the multi-dose regimen, the doses given were 0.03 and 0.3
milligrams per kilogram of body weight (mg/kg) and they were three
times two weeks apart. In the single dose subcutaneous regimen, the
doses were 0.03, 0.1 and 0.3 mg/kg doses. Patients on the
multi-dose regimen were followed for 84 days including 56 days
after their last dose. Patients on the single dose regimens were
followed for 56 days.

In designing the multiple dose study, the decision to dose every
2 weeks and give three doses was driven by pharmacokinetic
information requirements to design the Phase 2 study. It is
expected that XOMA 052 can be given every other month or less
frequently. The 84 day length of the study was chosen to capture
the nearer-term results. Of course, a longer study in Phase 2 may
show additional benefits as we do not know how far the increase in
some of the benefits extends.

In the multiple dose study, a tenfold range of doses was chosen
for safety and pharmacokinetic analysis. The lower dose level of
0.03 mg/kg times three is comparable to the 0.1 mg/kg intravenous
dose which worked well. The 0.3 mg/kg times three doses is
comparable to the 1.0 mg/kg intravenous dose which had less
activity.

Detailed Results

The results presented today include hsCRP, a biomarker for
cardiovascular risk, HbA1c, which measures glucose control over two
to three months, for diabetes. FDA recognizes HbA1c as an
approvable endpoint for diabetes medications. For the first time,
XOMA is also reporting results from evaluations of key diabetes
measures including fasting blood glucose, FBG, which measures blood
glucose in a fasting state at a single time point, and Homeostasis
Model Assessment Insulin Resistance, HOMA IR, a ratio of fasting
glucose to fasting insulin reflecting peripheral insulin
sensitivity. In addition, XOMA is reporting results of erythrocyte
sedimentation rate ESR, a biomarker of systemic inflammation that
confirms the hsCRP results.

Safety results: The safety results continue to show that XOMA
052 appears to be well tolerated by single dose and multiple dose
subcutaneous administration at the dose levels tested. There were
no reported serious adverse events, no notable changes in
laboratory parameters, no reported serious infections, no evidence
of neutropenia, no reports of drug-related hypoglycemia, no change
in weight, and no evidence of immunogenicity or neutralizing
antibodies. Adverse events were generally mild and similar between
the XOMA 052 and placebo groups. No maximum tolerated dose was
identified.

Bioavailability and pharmacokinetic results: The multiple dose
subcutaneous route of administration showed 62% bioavailability and
the single dose subcutaneous showed a 70% bioavailability for a
range of 62-70%. The pharmacokinetic results demonstrate a 23 day
half-life in the systemic circulation, typical for monoclonal
antibodies and consistent with monthly or less frequent dosing.
There were no drug-related serious adverse events or evidence of
drug-related hypoglycemia, injection site reactions or
immunogenicity.

Please see Table 1 below.

Anti-inflammatory results: At day 56, reductions in hsCRP were
observed in every XOMA 052-treated patient in both multiple dose
groups. ESR reductions in the multiple dose groups were rapid,
persistent and consistent with the hsCRP results.

Glycemic control results: The greatest glycemic control, as
measured by HbA1c and FBG, was observed at the 0.03 mg/kg multiple
dose cohort, with every patient demonstrating improvement in HbA1c
at day 56. The sustained reduction in FBG in this group resulted in
a 29 mg/dL decrease at day 84, which equates to approximately a 1%
reduction in HbA1c. Combined with the HbA1c data, this progressive
reduction in FBG indicates that HbA1c should continue to decrease
over time. As previously reported with the high dose IV cohort, no
evidence of glycemic control was observed in the 0.3 mg/kg multiple
dose group, which appears consistent with reduced activities at
higher doses of several other IL-1 targeting agents.

By Day 84, HOMA-IR was reduced by a median of 10% and 24% in the
0.03 and 0.3 mg/kg multidose groups, respectively, compared to a
median increase of 87% in the placebo group. In conjunction with
fasting blood glucose profile, this provides preliminary evidence
of increased insulin sensitivity for subjects treated with XOMA
052.

"The biological activity seen at very low doses may reflect the
ultra-high affinity of XOMA 052 for IL-1 beta, when compared with
the doses reported for other IL-1 targeting agents," Dr. Scannon
said. "Using this activity information along with the encouraging
safety profile from our Phase 1 trial, we have the opportunity to
explore a well-informed range of low doses as well as less frequent
dosing regimens in our Phase 2 program."

About XOMA 052

XOMA 052 is a potent monoclonal antibody with the potential to
improve the treatment of patients with a wide variety of
inflammatory diseases. XOMA 052 binds strongly to Il-1 beta, a
pro-inflammatory cytokine involved in the development of Type 2
diabetes, cardiovascular disease, rheumatoid arthritis, gout and
other diseases. By binding to IL-1 beta, XOMA 052 inhibits the
activation of the IL-1 receptor, thereby preventing the cellular
signaling events that produce inflammation. XOMA 052 has a
half-life of 22 days. Based on its binding properties, specificity
to IL-1 beta and half-life, XOMA 052 may provide convenient dosing
of once per month or less frequently.

XOMA developed XOMA 052 using the company's proprietary antibody
technologies, capabilities and expertise. XOMA owns worldwide
rights to the antibody and related intellectual property. The
company is actively pursuing a partnership for the development and
commercialization of XOMA 052.

Conference Call and Webcast

XOMA will hold a conference call and webcast today at 4:30 PM
Eastern time to discuss these results. Marc Y. Donath, M.D., a
pioneer in anti-inflammatory approaches to Type 2 diabetes,
Professor at the University Hospital of Zurich and XOMA 052
European clinical trial principal investigator, will participate on
the call with XOMA management. The webcast can be accessed via
XOMA's website at http://investors.xoma.com/events.cfm
and will be available for audio and slide replay until close of
business on October 14, 2009. Telephone numbers for the live
audiocast are 888-523-1245 (U.S./Canada) and 719-457-2734
(international). A telephonic replay will be available beginning
approximately two hours after the conclusion of the call until
close of business on July 21, 2009. Telephone numbers for the
replay are 888-203-1112 (U.S./Canada) and 719-457-0820
(international), passcode # 3435934.

XOMA's proprietary development pipeline is primarily funded by
multiple revenue streams resulting from the licensing of its
antibody technologies, product royalties, development
collaborations and biodefense contracts. XOMA's technologies and
experienced team have contributed to the success of marketed
antibody products, including LUCENTIS(r) (ranibizumab injection)
for wet age-related macular degeneration and CIMZIA(r)
(certolizumab pegol) for rheumatoid arthritis and Crohn's
disease.

The company has a premier antibody discovery and development
platform that incorporates leading antibody phage display libraries
and XOMA's proprietary Human Engineering(tm) and Bacterial Cell
Expression and manufacturing technologies. Bacterial Cell
Expression is a key breakthrough biotechnology for the discovery
and manufacturing of antibodies and other proteins. As a result,
more than 50 pharmaceutical and biotechnology companies have signed
BCE licenses.

In addition to developing its own products, XOMA develops
products with premier pharmaceutical companies including Novartis
AG, Schering-Plough Research Institute and Takeda Pharmaceutical
Company Limited. XOMA has a fully integrated product development
infrastructure, extending from pre-clinical science to approval,
and a team of about 200 employees at its Berkeley location. For
more information, please visit http://www.xoma.com.

Certain statements contained herein concerning the effects of
and possible dosing for XOMA 052, timing of initiation of clinical
trials and/or other aspects of product development or that
otherwise relate to future periods are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
statements are based on assumptions that may not prove accurate.
Actual results could differ materially from those anticipated due
to certain risks inherent in the biotechnology industry and for
companies engaged in the development of new products in a regulated
market.

Among other things, the effects of XOMA 052 may differ in later
preclinical or clinical data, dosing of XOMA 052 may be affected by
later testing results, and the timing of initiation of clinical
trials may be delayed or may never occur as a result of such
factors, unavailability of resources, actions or inaction by our
present or future collaboration partners, or unanticipated safety
issues. These and other risks, including those related to XOMA's
ability to remain in compliance with or renegotiate the
requirements of its loan agreements; the declining and generally
unstable nature of current economic conditions; the results of
discovery and pre-clinical testing; the timing or results of
pending and future clinical trials (including the design and
progress of clinical trials; safety and efficacy of the products
being tested; action, inaction or delay by the FDA, European or
other regulators or their advisory bodies; and analysis or
interpretation by, or submission to, these entities or others of
scientific data); changes in the status of existing collaborative
relationships; the ability of collaborators and other partners to
meet their obligations; XOMA's ability to meet the demands of the
United States government agency with which it has entered into its
government contracts; competition; market demands for products;
scale-up and marketing capabilities; availability of additional
licensing or collaboration opportunities; international operations;
share price volatility; XOMA's financing needs and opportunities;
uncertainties regarding the status of biotechnology patents;
uncertainties as to the costs of protecting intellectual property;
and risks associated with XOMA's status as a Bermuda company, are
described in more detail in XOMA's most recent filing on Form 10-K
and in other SEC filings. Consider such risks carefully when
considering XOMA's prospects.